Stock Trends

The S&P 20

Good morning,

It’s a market of stocks and this week we’re looking at the most important ones. Specifically, the top 20 stocks by weight in the S&P 500. Combined, they account for 43% of the index, so knowing what they are doing can provide remarkable insights into how the index itself may act.

The absolute technicals will be most important there, but we’ll also check in on relative strength to see if the top growth stocks are showing any signs of giving up leadership.

*Weights shown are as of February 8, 2024

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Microsoft: 7.33% weight

Microsoft has been on our Blue Chip Hot List since May 4, 2023, and remains in a strong uptrend. There’s the potential for $415 to turn into resistance but so far the stock has found support at its 21-DMA following Tuesday’s gap lower.

Apple: 6.55% weight

The more times a level is tested, the more likely it is to eventually break. That’s a reason I like big bases, but it works the same to the downside. Apple has rolled over at the 50-DMA and is now staring at its 4th test of the 200-DMA since the beginning of the year. Skeptical it can hold and at the very least, a weak stock vs. SPX.

Nvidia: 4.10% weight

Not even Tuesday’s hot CPI report could slow down Nvidia. It won’t last forever, but until the uptrend line is broken it is hard to recommend climbing off, no matter how extended it may seem.

Alphabet: 3.81% weight (Class A and C shares combined, A share shown below)

Alphabet made a new all-time high at the end of January, but a disappointing earnings report pushed the stock back below the 2021 highs. We got a bounce at the $140 support zone but look to be failing at $152 once again. Still an upward bias, but the stock hasn’t been a relative leader. $136.50 is tactical support.